Saving for a Buy-To-Let

dreamvendour

Hi all,
My husband and I would like to start saving for a buy-to-let to get to 50k deposit needed in five year's time. I'm however confused as to how to best save this money - I couldn't find any good savings accounts on this website as they are all about small amounts and it looks like each of us can only put 20k into cash ISA without paying any tax. What would be the most cost-effective way of putting this money together? I understand that Lifetime ISA is not an option as my husband has already owned property (although I haven't) and buy to lets are not qualified under this scheme anyway. 
Thank you!

eskbanker

dreamvendour said:

I couldn't find any good savings accounts on this website

That'll be because there aren't any good savings accounts!  Interest rates are negligible just now, although you can fix for multiple years if it's medium term money.

dreamvendour said:

it looks like each of us can only put 20k into cash ISA without paying any tax

£20K each per tax year.


However, in terms of your overall objectives, what's the end game?  Many have seen BTL as a form of investment, but this is less profitable than it used to be (and likely to continue to become even less so), so if you're looking at it in those terms, it's already potentially sub-optimal (especially if you could already get your money working for you in mainstream financial investments), but if you have your hearts set on becoming landlords for other reasons then I suppose that's different....

Another_Saver

You can put £20k per year into ISAs before paying tax on the growth of money in the ISA.
However it's very unlikely that you'll need to because of how low interest rates are anyway (https://www.moneysavingexpert.com/savings/best-cash-isa, see the section on whether cash ISAs are worth it).
Literally all you can do is save the money, either in your current account, a savings account or cash ISA.

jsmith9

I would avoid BTL - that ship has already sailed and is sinking fast. Just my opinion of course.

Watch out for Section 21 changes.

Also it my be that in 5 years time when you have got your 50k together the property has increased by that amount. Again, just an opinion and very much dependent on lots of factors.

[Deleted User]

BTL is becoming Buy-To-Loose for inexperienced landlords, sadly. I suggest to avoid this type of investment and look elsewhere, at more liquid investments, like stock market. Less hassle, all tax free within stocks and shares ISA, and less risk with well balanced portfolio.

dreamvendour

[Deleted User] said:

BTL is becoming Buy-To-Loose for inexperienced landlords, sadly. I suggest to avoid this type of investment and look elsewhere, at more liquid investments, like stock market. Less hassle, all tax free within stocks and shares ISA, and less risk with well balanced portfolio.

Hey thanks a lot! Where would you recommend getting more info about it? I know next to nothing about investing in stocks but we can put it about 900 a month into some kind of an investment. Our situation is a bit strange as we live with parents but like it. I wanted to get a BTL because this would mean that we'll have a house at some point when we need it. 

dreamvendour

eskbanker said:

dreamvendour said:

I couldn't find any good savings accounts on this website

That'll be because there aren't any good savings accounts!  Interest rates are negligible just now, although you can fix for multiple years if it's medium term money.

dreamvendour said:

it looks like each of us can only put 20k into cash ISA without paying any tax

£20K each per tax year.


However, in terms of your overall objectives, what's the end game?  Many have seen BTL as a form of investment, but this is less profitable than it used to be (and likely to continue to become even less so), so if you're looking at it in those terms, it's already potentially sub-optimal (especially if you could already get your money working for you in mainstream financial investments), but if you have your hearts set on becoming landlords for other reasons then I suppose that's different....

Thanks a lot for your comment! Would you recommend an easy way to start investing?

[Deleted User]

dreamvendour said:

[Deleted User] said:

BTL is becoming Buy-To-Loose for inexperienced landlords, sadly. I suggest to avoid this type of investment and look elsewhere, at more liquid investments, like stock market. Less hassle, all tax free within stocks and shares ISA, and less risk with well balanced portfolio.

Hey thanks a lot! Where would you recommend getting more info about it? I know next to nothing about investing in stocks but we can put it about 900 a month into some kind of an investment. Our situation is a bit strange as we live with parents but like it. I wanted to get a BTL because this would mean that we'll have a house at some point when we need it. 

I suggest to spent some time here, on forums. You will find a lot of valuable information here. Popular solution is to invest into passive index funds within your tax free ISA account, SIPP account is also worth to look out for. Check out names like Vanguard Investor with their Life Strategy funds and so on.

csgohan4

monevator website does a very guide and used myself when I first started out

https://monevator.com/category/investing/passive-investing-investing/

I would avoid shares as a beginner and focus on index tracker funds